Month yor May June July August Sales in Units 3,490 3,830 4,630 4.115 4,000 Croy

Question

Month yor May June July August Sales in Units 3,490 3,830 4,630 4.115 4,000 Croy's finished goods inventory policy is to have 60 percent of the next month's sales on hand at the end of each month. Direct material costs $3.10 per pound, and each unit requires 2 pounds. pounds. Raw materials inventory policy is to have 50 percent of the next month's production needs on hand at the end of each month. Raw materials on hand at March 31 totaled 3,694 Required: 1. Determine budgeted production for April, May, and June. (Do not round your intermediate calculations and round your final answer to the nearest whole number.) April May June Budgeted Production (Units) 2. Determine the budgeted cost of materials purchased for April, May, and June. (Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.) April May June Budgeted Cost of Material Purchased

Explanation / Answer

Requirement 1 Budgeted production (Units) April May June Required ending Finished goods inventory (units)             2,298             2,778 2,469 (3830X60%) (4630X60%) (4115X60%) Add: Sales (units)             3,490             3,830 4,630             5,788             6,608 7,099 Less: Beginning Finished goods inventory (units)             2,094             2,298 2,778 (3490X60%) (3830X60%) (4630X60%) Budgeted production (Units)             3,694             4,310 4,321 Requirement 2 Budgeted cost of materials purchased April May June Budgeted production (Units)             3,694             4,310 4,321 Required material for production (pounds)             7,388             8,620 8,642 (3694X2) (4310X2) (4321X2) Add:Required Ending raw material inventory (pounds)             4,310             4,321 4,115 (8620X50%) (8642X50%) (4115X2X50%)           11,698           12,941 12,757 Less: Beginning raw material inventory (Pounds)             3,694             4,310 4,321 Budgeted raw materials to be purchased (pounds)             8,004             8,631 8,436 Budgeted cost of materials purchased ($)           24,812           26,756 26,152 (8004X3.1) (8631X3.1) (8436X3.1)

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